The VUCA Operating Context

Every organization, large or small, is now operating in an environment which is influenced to a greater extent than has historically been the case by:

  • The range of ‘ecosystem players’ and relationships to be managed.

  • People’s changing expectations, aspirations, and societal values.

  • Political imperatives, regulatory and environmental change.

  • Paradoxes (e.g. ‘globalization and fragmentation/localization’).

  • Disruptive innovation reflected in new products, or current products delivered by new methods and/or to a new market segment.

 

ICT has enabled all these influencers to interconnect and interplay more easily and more rapidly; driving turbulence and an exponential rate of change.  This ‘hypercompetitive’ operating environment may be described by the mnemonic VUCA which may be described as:

  • Volatility - a situation is unstable and may change very rapidly.

  • Uncertainty - how a situation develops is not predictable; both the set of variables relating to the problem, and information about the variables may be imperfect, incomplete or unknown.

  • Complexity - the situation is dynamic with a large number of non-linear interacting elements producing disproportionately large consequences.

  • Ambiguity - Multiple interpretations exist for information relating to a situation,  causal relationships may be unclear

 

VUCA is both an outcome of the turbulent external environment, and a driver of it.  VUCA creates the ‘fog’ that obfuscates, and hinders decision making and planning; you need an approach to strategy development, execution and evolution that exploits VUCA to your advantage and which minimises the effect of ‘fog’.

The term VUCA was first used in the US Army War College in 1987; it has since become popularised in business leadership media.

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